Home loans

Limits

The following are the limits that apply to standard Kiwibank Home Loans and Kiwibank Welcome Home Loans:

Early repayment limit

You can make extra payments in any year of a fixed term loan of up to 5% of the loan amount, either through increased repayments and/or lump sum payments. You could be liable for lump sum repayment fees and fixed rate break costs if your total additional repayments exceed 5% of the loan amount at the start of the fixed term loan.

Example 1 - lump sum payment: on the 10th of October 2014 you place a loan with a balance of $100,000 on a fixed interest rate for 2 years. Each year you would like to pay a lump sum off your fixed term loan without incurring lump sum repayment fees or fixed rate break costs.

In the year 10/10/2014 – 09/10/2015 you are able to pay a lump sum of $5,000 (5% of $100,000 — the amounts owing on the fixed component at the start date of the fixed term), and

In the year 10/10/2015 – 09/10/2016 you are able to pay a further lump sum of $5000 (5% of $100,000).

Example 2 - repayments above the minimum repayment amount: on the 10th of October 2014 you place a loan with a balance of $120,000 on a fixed interest rate for 2 years. You realise you are in a position to make a repayment higher than the minimum repayment of $2,000 per month. You may increase your repayment for the fixed term up to $2,500 per month. This is made up of the minimum repayment of $2,000 plus 5% of the amounts owing on the fixed component divided by 12 months ($2,000 + (5% × $120,000 / 12)).